Cases

Philadelphia, Dec. 13, 2012 –The City of Philadelphia has signed a no-fault settlement agreement with Aramark Correctional Services (ACS) and Strother Enterprises, Inc. (Strother) to conclude a dispute over allegations that the companies circumvented the City’s minority-business requirements and anti-discrimination policies by submitting inaccurate invoices to the City for payment under ACS’ food-services contracts with the Philadelphia Prison System (PPS).

According to the settlement, the companies will pay the City a total of $400,000 and incorporate new internal policies to ensure their compliance with anti-discrimination policies on future contracts with the City and/or City-related agencies.

The settlement was the result of a Philadelphia Office of the Inspector General investigation into allegations that ACS had inaccurately reported payments made to Strother in documentation submitted to the City. Although Strother, a City-certified minority-business entity, performed actual work in connection with PPS food-services contracts, the OIG found that the company had engaged in a circular billing arrangement with ACS, which made it appear that Strother had performed a larger percentage of the contracted work than it had actually performed.

Contractors working on a $13-million Brooklyn affordable housing project paid thugs to throw acid and beat workers who blew the whistle on a kickback scheme that led to the indictment of a top city official, court papers show.

The contractors worked for Bogdan Starzecki, head of MCR Restoration Corp., whom sources identified as a witness against Assistant Housing Commissioner Wendell Walters.

Walters, a key official in the Housing Preservation and Development department’s affordable housing program, was charged Oct. 6 with pocketing $600,000 in bribes from developers and contractors, including Starzecki, since 2002.

Eleven people, including two doctors and a former union president, were charged on Thursday in a “massive fraud scheme” in which hundreds of Long Island Rail Road workers made false disability pension claims that could have cost a federal pension agency about $1 billion, according to court papers.

A total of 10 of the defendants — seven former railroad workers charged with making false pension claims, the former union president, a former federal railroad pension agency employee who helped the workers file the claims, and one of the doctors — were taken into custody in the early morning hours at their homes by F.B.I. agents and state investigators, officials said. The other doctor is expected to surrender in the coming days.

All were charged with mail fraud and conspiracy to commit health care fraud, according to a criminal complaint filed in the case. The defendants in custody were expected to be arraigned later on Thursday in Federal District Court in Manhattan.

In recent years, federal prosecutors say, Wendell B. Walters has spent a fair amount of time scribbling down numbers on little pieces of paper.

He did it in a coffee shop in Manhattan in 2002, when he wrote “250.” He did it at a golf driving range in 2007; then, the number was “70.” And he did it three other times, according to court papers unsealed Thursday in his federal bribery and racketeering conspiracy case.

Wendall Walters, Former Assistant Commissioner, Housing Preservation Department, New York City

In each instance, the papers say, Mr. Walters, who was an assistant commissioner at the city’s Department of Housing Preservation and Development, was demanding a bribe.

A July 2011 report by the Inspector General, U.S. Department of Health and Human Services, found that power wheelchairs paid for by Medicare are not always medically necessary and that claims for power wheelchairs frequently have insufficient documentation to support medical necessity. The report found that of the $189 million that Medicare allowed for power wheelchairs provided in the first half of 2007, $95 million was for power wheelchairs that were medically unnecessary or had claims that were insufficiently documented.

Sixty-one percent of power wheelchairs provided to Medicare beneficiaries in the first half of 2007 were medically unnecessary or had claims that lacked sufficient documentation to determine medical necessity. Based on records submitted by suppliers that provided power wheelchairs, 9 percent of power wheelchairs were medically unnecessary and another 52 percent had claims that were insufficiently documented to determine whether the power wheelchairs were medically necessary. Read more →

The U.S. Army’s massive SAP software project is “at high risk” of running further over time and budget, according to a recent report by the Department of Defense’s Inspector General’s Office.

Auditors sought to determine whether DoD and Army officials managing the project had taken the proper steps to fix problems identified in a 2008 report by the Inspector General’s Office, according to the report, which was released last month.

Their actions were insufficient, auditors found. “The Army estimates it will spend $2.4 billion over the [project] life cycle; however, it still has not identified all of the requirements and costs associated with the project,” the report stated. “In addition, the DoD and Army did not implement 7 of the 16 recommendations we made in our prior report.”

ALBANY — A former top agriculture regulator used his position to steer $100,000 in aid to a nonprofit group that employed his wife as a consultant, according to an investigation report obtained by The New York Times.

NYS IG Ellen Nachtigall Biben

The office of Inspector General Ellen N. Biben, which wrote the report, is referring the case to the state ethics commission and to the Albany County district attorney.

The regulator, Jerry Cosgrove, who was deputy commissioner of the state Department of Agriculture and Markets until he was fired last year because of the investigation, denied the allegations made in the report, according to his lawyer.

Private health insurers overstated how much they spent on patient care and owe Florida health officials $3.1 million in refunds for a government children’s health care program, according to a recent federal report.

Under a joint state-federal program called the State Children’s Health Insurance Program, Florida’s Agency for Health Care Administration pays private insurers to provide health insurance for families who aren’t eligible for Medicaid but can’t afford private insurance. Insurance companies are required to spend at least 85 percent on medical services. If an insurer spends less, it must refund 50 percent of the shortfall to the state.

A former National Security Agency manager accepted a plea deal Thursday that cleared him of espionage charges stemming from the alleged leak of classified information to a Baltimore Sun reporter.

Thomas Drake had been charged with 10 felonies but will plead guilty to a misdemeanor: exceeding the authorized use of a computer. If convicted of the felonies, he could have faced 35 years in prison. Under the plea bargain, he is not expected to serve any time.

Drake, a former Air Force officer, had been charged under the Espionage Act even though he allegedly leaked information to a newspaper, not an enemy power.

“He feels a profound mixture of emotions after five years of investigation and one year of being under indictment,” said Jesselyn Radack, a supporter and a director at the Government Accountability Project, which seeks to protect whistle-blowers. Drake is not allowed to comment until after his court appearance in Baltimore on Friday, she said.